(Updated April 2026) Certificates of origin (HKN) are the central instrument for Tracking and marketing of electricity from renewable energies in Europe. They ensure that green electricity can be clearly allocated in accounting, regardless of where the physical electricity is actually consumed.
For companies, HKNs are becoming increasingly important, especially in the context of:
- CO₂ Accounting (Scope 2)
- ESG Reporting (e.g., CSRD)
- Strombeschaffung und Green PPAs
What are Guarantees of Origin (GO)?
A proof of origin is an electronic certificate that confirms that one megawatt-hour (1 MWh) of electricity from renewable energy was generated.
Important: The HKN is tradable separately from the physical supply.
That means:
- Only by possessing and retiring an HKN can electricity be designated as „green.“
- Electricity and „green electricity properties“ are marketed independently
Can operators of PV systems generate additional profits through HKN trading?
Yes – Operators of photovoltaic or other renewable energy systems can generate additional revenue by selling Guarantees of Origin. The prerequisite is that the electricity generated is not subsidized by the EEG (e.g., no market premium or feed-in tariff).
How does that work in detail?
If a PV system feeds electricity into the public grid and does not receive any subsidies:
- For every megawatt-hour fed in, a certificate of origin is issued
- This HKN can be sold separately on the market
- Buyers are mostly energy suppliers or companies with green electricity needs
Important: Electricity and the certificate of origin will marketed separately
What is the revenue from HKN trading?
Proceeds from certificates of origin depend heavily on the market price. Typical price levels (as of 2025/2026):
- Standard-HKN (e.g., Hydropower, Scandinavia):
California. 1–3 EUR/MWh - Higher quality renewable energy sources (e.g., solar or wind from Germany):
California. 3–8 €/MWh - In individual cases (e.g., high demand, special criteria):
→ also possible
When is HKN trading particularly worthwhile?
The additional yield is particularly interesting when:
- the facility in the other direct marketing runs
- one Power Purchase Agreement (PPA) consists of
- no more EEG funding (post-EEG installations)
In these cases, HKN are an important component of overall marketing.
When is no additional HKN yield possible?
No separate revenue arises when:
- the system a EEG funding receives
- the electricity is completely consumed internally
- no feed-in to the public grid takes place
How do origin certificates work? (Simply explained)
The HKN system is based on three steps:
Exhibition
- For electricity generated from renewable energies, an HKN is generated
- Prerequisite: Feed-in to the public grid
- 1 HKN = 1 MWh
2. Handel
- HKNs can be sold independently of electricity
- Buyers are mostly:
- Energy supplier
- Electricity trader
- Large companies
Trading is carried out throughout Europe via registries and brokers.
3. Devaluation
- HKNs are „devalued“ when selling electricity to end customers.“
- Only then may electricity be labeled as renewable
Without cancellation → no „green electricity“ in the legal sense
HKNs are important for companies because...
1. CO₂ balance (Scope 2)
Companies can reduce their indirect emissions by purchasing electricity with devalued renewable energy certificates.
2. ESG and Reporting Obligations
HCNs are a central building block for evidence.
3. Flexible Green Electricity Procurement
- No physical delivery necessary
- Europe-wide availability
How does trading with Guarantees of Origin work?
The HKN trade is a standalone market with growing importance.
Market participants
- Plant operator (producer)
- Power Trader / Broker
- Energy supplier
- Companies as end-users
Trade mechanisms
- Bilateral treaties
- Spot market / OTC trading
- Integration in Power Purchase Agreements (PPAs)
Especially relevant: HKN are often separately or bundled with electricity contracts traded
Price development
HKN prices have increased in recent years, influenced by:
- increasing demand from companies
- regulatory requirements
- Limited supply of high-quality certificates
In high demand are:
- Technology-specific HKN (e.g., solar, wind)
- local or recent proof of origin
What role do HKNs play in Power Purchase Agreements (PPAs)?
With Power Purchase Agreements Are HKN a central component?
- You are transferring the „green property“ of the electricity
- allow for crediting toward the CO₂ balance
- Increase the economic value of a PPA
Without an HKN, a PPA is not a green electricity contract from an accounting perspective.
What are the limitations of HKN?
- No double marketing – electricity may not be subsidized and marketed with HKN simultaneously
- No HKN for self-consumption – HKN is only for electricity fed into the public grid
- Time Limit – HKNs have a limited validity (usually 12-18 months)
Conclusion: Guarantees of origin as added value for renewable energy
Origin certificates (HKN) are a central building block for marketing electricity from renewable energies. They ensure that green electricity can be clearly traced and only sold once as „CO₂-neutral“. For operators of photovoltaic, wind, or other renewable energy systems, HKN offers the opportunity to, to achieve additional revenue, especially if no EEG subsidies are used or plants are operated via direct marketing.
Trading HKN is involved legally clearly regulated – on a national level through the Energy Industry Act (§ 42 EnWG, § 30 HkRNDV) and European through the specifications of the Association of Issuing Bodies (AIB). Plant operators and energy suppliers must maintain their accounts in the Certificate of Origin Register (HKNR) in order to correctly redeem the HKNs.
While HKN revenue is generally An add-on module, but especially in combination with Green PPAs or strategic direct marketing create tangible added economic value. Those who manage their HKN professionally – for example, through a management system or an experienced partner – secure the best possible returns while simultaneously meeting transparency and sustainability requirements for companies, investors, and regulatory mandates.
In short: Renewable energy sources are not a primary driver of profit, but an indispensable instrument for sustainable energy projects and a clear value lever in the modern energy industry.
Regulatory Framework in Germany & Europe
Proof of origin is legally clearly regulated – both at the national and European level. The goal is to uniform, transparent, and forgery-proof electricity labeling to ensure.
Germany: EneG, EEG, and HkRNDV in conjunction
The legal basis for guarantees of origin in Germany arises from several laws and ordinances:
1. Energy Industry Act (EnWG) – Electricity Labeling (§ 42 EnWG)
The Energy Industry Act regulates the obligation for electricity labeling.
- § 42 of the German Energy Industry Act (EnWG) obliges energy suppliers to disclose:
- what are the sources of your electricity
- what is the share of renewable energies
Crucial: Electricity may only be designated as „renewable“ if Origin certificates have been invalidated. § 42 para. 5 EnWG specifies: The „green characteristic“ of the electricity arises only through the devaluation of the HKN.
Renewable Energy Sources Act (EEG)
The Renewable Energy Sources Act regulates the promotion of renewable energies – with a direct impact on HKN.
Central Rule: Subsidized electricity (e.g., market premium, feed-in tariff) may not receive HKN.
Background:
- Avoiding Double Marketing
- State-subsidized electricity is already considered „renewable“ in accounting.“
Relevant Regulations:
- EEG § 19 → Funding claims
- § 80 EEG (or previous regulations) → Electricity Labeling
3. Ordinance on the Implementation of Origin and Regional Proof (HkRNDV)
The HkRNDV operationalizes the HKN system. It regulates, among other things:
- Issuance of certificates of origin
- Transfer between market participants
- Invalidation of certificates
- Deadlines and Validity
Key points:
- 1 HKN = 1 MWh electricity
- Exhibition only when feeding into the public grid
- Redemption required within 12-18 months
- Guidance on the Origin Certificate Register (HKNR)
4. Certificate of Origin Register (HKNR) at the Federal Environment Agency
The HKNR is the central platform for HKN trading in Germany.
- Account management for:
- Plant operator
- Retailer
- Energy supplier
Important:
- Only registered market participants can trade or redeem HKN
- All transactions are documented and reviewed
Europe: RED II / RED III and Market Harmonization
At the European level, the system is based on the Renewable Energy Directive:
1. Renewable Energy Directive (RED II / RED III)
The Renewable Energy Directive provides the framework for guarantees of origin in Europe.
Core Content
- Introduction of a Europe-wide harmonized HKN system
- Commitment to mutual recognition of certificates
- Definition of standards for:
- Exhibition
- Trade
- Devaluation
Goal: One functioning internal market for green electricity certificates
2. Association of Issuing Bodies (AIB) & EECS System
The Association of Issuing Bodies coordinates the national registries.
- Operation of EECS-Systems (European Energy Certificate System)
- Safeguarding
- uniform standards
- cross-border trade
- Avoid double counting
Result: HKNs are interchangeable EU-wide.
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